The Ger­man su­per­mar­ket gi­ant now em­ploys 3,200 staff in Ire­land af­ter spend­ing €1.2bn, and last year con­trib­uted €1.2bn to the na­tion’s GDP. MD Giles Hur­ley sees no rea­son to stop de­spite in­creas­ing mar­ket chal­lenges, writes John Mul­li­gan

Irish Independent - Business Week - - INTERVIEW -

were down 17pc as the chain kept mar­gins low amid in­tense com­pe­ti­tion.

Aldi and Lidl did well from the down­turn, with their promise of lower-priced, qual­ity pro­duce res­onat­ing with hard-pressed con­sumers. And they have man­aged to hang on to shop­pers who had ven­tured through their doors nurs­ing their pay che­ques.

Hur­ley says the cus­tomer re­mains “at the heart” of Aldi’s de­ci­sion-mak­ing, and that push­ing prod­ucts made in Ire­land yields div­i­dends for the chain. He also reck­ons that Aldi’s share of sales vol­umes is prob­a­bly “three of four per­cent­age points higher” than the share based in value of sales.

“Con­sumers in Ire­land want to buy

Ir­ish,” he says. “With Ir­ish prod­uct comes that sense of as­sur­ance and qual­ity and of sup­port­ing our own.”

There’s no doubt that for many sup­pli­ers, the push by gro­cery chains here to stock in­no­va­tive pro­duce has spurred growth in the do­mes­tic food sec­tor. New Ir­ish prod­ucts emerge all the time, with some, such as Ker­ry­gold Short­bread Bis­cuits and dairy-free ice-cream maker Nobo, man­ag­ing to quickly break into global mar­kets.

Aldi spent about €700m buy­ing from Ir­ish sup­pli­ers last year. Among the com­pa­nies do­ing well from a re­la­tion­ship with the chain is Water­ford-based Black­wa­ter Dis­tillery. Its small-batch Boyle’s Gin is be­ing sold ex­clu­sively through Aldi, and the chain has bagged 15,000 cases worth £300,000 (€340,000) to sell in its UK stores in the run-up to Christ­mas.

Aldi has a 6.9pc share of the UK gro­cery mar­ket, which is worth a to­tal of about £180bn (€204bn), so the po­ten­tial for Ir­ish sup­pli­ers that get a toe­hold in the mar­ket there is sig­nif­i­cant.

But could the fo­cus by gro­cery re­tail­ers on beef­ing up their re­la­tion­ship with Ir­ish sup­pli­ers and show­cas­ing Ir­ish food as a sell­ing point be­come tired, now that all of the main gro­cery chains have latched on to it?

“The key is to con­tinue to breathe life into it,” says Hur­ley. “You have to con­tinue to in­no­vate and that means al­ways work­ing with the sup­plier base to find the best new prod­ucts and op­por­tu­ni­ties.” And those new op­por­tu­ni­ties in­clude push­ing sales of Ir­ish prod­ucts into other Aldi ge­ogra­phies, as has hap­pened with Boyle’s Gin.

“Hav­ing fos­tered these re­la­tion­ships, to sup­port those sup­pli­ers to con­tinue grow­ing their vol­ume is a great story,” he says. “As their vol­umes grow, it’s good for their cost base, and that’s a ben­e­fit for us too.”

Hur­ley in­sists that the prove­nance of food, es­pe­cially for mil­len­ni­als, re­mains im­por­tant in their gro­cery buy­ing de­ci­sions.

But con­cerns over so-called food miles of­ten evap­o­rate when the cold, hard re­al­ity of pric­ing comes into the equa­tion. Will con­sumers re­ally pay more for a vegetable or fruit grown in Eu­rope rather than one im­ported from say, Morocco?

“There is a bit of an irony,” Hur­ley con­cedes. “Con­sumers would like ev­ery­thing, but they want it in a way that’s sus­tain­able. I think that’s a bit of a chal­lenge for re­tail­ers in terms of how we do that. But if Ir­ish con­sumers want Ir­ish straw­ber­ries in April, let’s find a way to make that hap­pen.”

“Peo­ple have to vote with the money in their pock­ets,” he agrees. “Bas­mati rice is al­ways go­ing to come from In­dia. Parma ham will al­ways come from Italy, but there are lots of other ar­eas where there are op­por­tu­ni­ties to in­no­vate. And you don’t have to have a hefty price tag to get qual­ity.”

Born in Sur­rey, Hur­ley might have a strong English ac­cent, but his par­ents are Ir­ish and he has spent a big chunk of his life in Ire­land.

He was a boarder at the pricey Head­fort pri­mary school in Kells, Co Meath, be­fore re­turn­ing to the UK for his se­condary ed­u­ca­tion. He stud­ied his­tory in Trin­ity Col­lege, Dublin, and taught English in China be­fore head­ing home and join­ing the McDon­ald’s grad­u­ate train­ing pro­gramme.

Hur­ley ap­plied for his first Aldi job us­ing his ad­dress in Done­gal, de­spite be­ing based in Dublin at the time.

“I think in those em­bry­onic days in Ire­land they thought: ‘Oh there’s some­body from Done­gal and we’ve got a store in Let­terkenny’,” he says on first get­ting through the Aldi door.

The pace of in­vest­ment quickly ac­cel­er­ated.

A study pre­pared for the chain this year es­ti­mated that Aldi, which em­ploys 3,200 peo­ple here, has spent €1.2bn on cap­i­tal ex­pen­di­ture in Ire­land since its de­but, and con­trib­uted €1.2bn to Ire­land’s gross do­mes­tic prod­uct last year.

Ear­lier this year, the chain em­barked on a €60m project to ex­pand its ar­ray of fresh foods at its stores in Ire­land. That has also seen it move fresh pro­duce to the front of stores, and also trial bak­eries.

Hur­ley says that Aldi and Lidl played a key role mak­ing own-brand prod­ucts, or ex­clu­sive brands as he likes to de­scribe them, more main­stream in Ire­land.

“You just need to track the pop­u­lar­ity of brands in Ire­land over the past 15 years to see how it’s changed,” he says. “We’re 17pc of the nappy mar­ket in Ire­land now for in­stance. That’s a mas­sive share and makes us the sec­ond-big­gest brand in Ire­land.”

Aldi hopes to open about 10 new stores next year in Ire­land, and has €100m “ringfenced”, says Hur­ley, to open a to­tal of 20 new out­lets in the next three years.

“It’s slightly qui­eter than we would have liked this year,” he says, adding that there is “plenty com­ing down the tracks”.

“How big are we go­ing to get? It’s dif­fi­cult to an­swer. We’ll keep on adding stores as long as we’re grow­ing sales. Another 20 will bring us to 150 stores. Could there be another 50 stores af­ter that? Yes, I think there could be. We’re un­der-rep­re­sented in Dublin. It’s a big op­por­tu­nity. It’s a great com­plaint to have that we want to open more stores more quickly.”

‘We’re un­der-rep­re­sented in Dublin. It’s a big op­por­tu­nity,’ says

Giles Hur­ley, pic­tured at con­fer­ence in Por­tar­ling­ton

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